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Japanese investors' confidence in Vietnam's stock remains unchanged: expert
The confidence of Japanese investors in the Vietnamese stock market remains unchanged, and the arrest of banking mogul Nguyen Duc Kien is not a serious enough event to require an urgent escape from it, newswire Vietstockquoted a Japanese expert.
“It is not easy to find a stock market with projected Price-Earnings Ratio (P/E Ratio) at only 10, high dividend rates, and cheap stock prices as that in Vietnam,” Akira Le quoted Japanese economist Imai Masayuki as saying in a recent interview at a Tokyo television channel.
Kien’s arrest has dominated both local and international media reporting on the Vietnamese economy, overwhelming positive information about the macroeconomic, financial and banking sectors, he said.
Psychological confusion has inadvertently overshadowed everything, leading local investors towards panic selling.
“The arrest of an entrepreneur that can shake a broad stock market is rare,” added Masayuki.
“But this may happen only in the short term, helping the market adjust after several consecutive rallies.
“The current state of Vietnam’s economy and the Vietnamese securities market is similar to Japan from 1950-1960, when Japan was still poor.
“It was difficult to control the Japanese banking system then, and local enterprises were working with a reckless manner due to the lack of transparency, causing a lot of business mistakes.”
But the situation eventually improved thanks to the prosecution of many economic and financial criminals which contributed to the deterrence of economic and financial crimes and the improvement of business leadership quality.
It also helped business communities realize that personal reputation is the most important thing in doing business.
As famed investor Warren Buffett once said: "It took 20 years to build a reputation, but it only takes two minutes to destroy it", Japanese investors can sympathize with the current situation in Vietnam after looking back into the history of Japan.
Experts say that this phenomenon is common in emerging economies.
After the arrest of Kien on Tuesday, a wide range of financial information channels in Japan, such as Yahoo! Finance Securities Japan, Morningstar Japan, and MarketHack stepped in to report the case.
According to Yahoo! Finance Japan, the arrest of Nguyen Duc Kien – a member of the Asia Commercial Bank (ACB) founding board, has sent shockwaves across the country.
Kien’s reputation and influence led local investors to a panic sell-off of bank shares, creating a spillover effect on all other stocks.
Before the arrest story broke, a Japanese investor who once lived in Ho Chi Minh City commented on Twitter that he thought the cause of the stock drop immediately after the opening of Tuesday’s trading session was the rise of the consumer price index (CPI) in Hanoi and Ho Chi Minh City. But to his surprise, there was shocking news: “Kien was arrested".
"Domestic investors rushed to sell everything, even good stocks unrelated to ACB. Taking advantage of the plummeting market, foreign investors bought large amounts of stocks. We need to monitor market developments in the next few days ".
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